European Markets Set for Sharp Decline Following Trump's Tariffs
European markets are expected to open sharply lower on Monday following U.S. President Donald Trump's imposition of trade tariffs on several countries, including potential tariffs on the European Union and the U.K.
The U.K.'s FTSE 100 index is anticipated to decline by 116 points, opening at 8,563. Germany's DAX is forecasted to drop by 498 points to 21,217, while France's CAC is projected to fall by 166 points to 7,772. Italy's FTSE MIB is expected to decrease by 901 points to 35,708, according to data from IG.
Market reactions are expected as a result of Trump's decision made over the weekend to impose a 25% tariff on imports from Mexico and Canada, as well as a 10% levy on goods imported from China. These tariffs will take effect on Tuesday, impacting approximately $1.6 trillion in trade between the U.S. and the three countries.
In retaliation, Canada has announced sanctions on U.S. imports, while Mexico has threatened similar actions.
When asked about the possibility of tariffs affecting goods from the U.K. and the European Union, Trump described both as "out of line," stating that the EU was in a worse position. He suggested that a deal could be "worked out" with the U.K., a country with which the U.S. maintains a more balanced trade relationship.
Trump also characterized the U.S. trade deficit with the EU as an "atrocity," repeating claims that the EU had "really taken advantage" of the United States. European Union officials indicated earlier that the bloc could respond in a "proportionate way" to any future U.S. tariffs.
In addition, Asia-Pacific markets displayed a downward trend overnight due to Trump's tariff announcement, while U.S. stock futures also fell Sunday night as investors considered the economic repercussions and potential impact on corporate profits.
Market earnings in Europe are set to come from Julius Baer on Monday, alongside the release of the latest euro zone inflation data.
